TNAG-2465-FCO40-3589-Hong-Kong-Coordinating-Committee-for-Multilateral-Export-Con-1992 — Page 19

SECRET

SECRET

FM HONG KONG

TO IMMEDIATE FCO

TELNO 2481

OF 091145Z OCTOBER 92

INFO MODUK, DTI, WASHINGTON, PEKING

нив 087

007/1

30

123000 MDHIAN 2665

SIC

SUSPECTED DIVERSION OF MILITARY EQUIPMENT TO IRAN.

SUMMARY

INVESTIGATION BY HKG HAS REVEALED SUSPECTED ILLEGAL DIVERSION OF MISSILE PARTS FROM CHINA TO IRAN VIA HONG KONG. THE CASE COULD HAVE SERIOUS POLITICAL AND ECONOMIC IMPLICATIONS. INVESTIGATIONS ARE CONTINUING.

DETAIL

2.

ON 30 JULY 1992, A LOCAL COMPANY, JETPOWER INDUSTRIAL LTD., APPLIED FOR A LICENCE TO EXPORT THREE MAGNETRONS TO IRAN. THE MAGNETRONS WERE STATED AS BEING FOR USE IN CIVIL AIRCRAFT. ON 13 AUGUST 1992, ACTING ON INTELLIGENCE, HONG KONG CUSTOMS RAIDED JETPOWER AND TWO CONNECTED COMPANIES, HAWKER PACIFIC LTD, AND GOLDEN LAWELL LTD, AN IRANIAN OWNED COMPANY (PREVIOUSLY KNOWN AS FAISUN LTD), AND SEIZED THE MAGNETRONS AND DOCUMENTS RELATING TO SHIPMENTS OVER THE PAST TWO YEARS.

3. PRELIMINARY INVESTIGATIONS (WITH THE ASSISTANCE OF THE MILITARY BASED IN HONG KONG) INDICATE THAT THE MAGNETRONS ARE PROBABLY MICROWAVE OSCILLATORS FORMING PART OF THE TARGET DETECTION SYSTEM OF THE US-BUILT PHOENIX MISSILE. CONFIRMATION THAT THIS IS THE CASE WOULD NEED THE MAGNETRONS TO BE OPENED UP AND EXAMINED. THE ORDER FOR THE GOODS WAS PLACED WITH JETPOWER BY GOLDEN LAWELL. JETPOWER WAS SUPPLIED BY HAWKER PACIFIC, AN INDIRECT SUBSIDIARY OF HAWKER SIDDELY, WHICH CLAIMS TO HAVE IMPORTED THE MAGNETRONS FROM CHINA. IT IS NOT KNOWN WHETHER THE MAGNETRONS ARE US ORIGINALS OR CHINESE-MADE COPIES.

4.

EXAMINATION OF THE DOCUMENTATION INDICATES THAT, DURING THE PAST TWO YEARS, JETPOWER HAS SHIPPED 1,300 CONSIGNMENTS OF GOODS OF VARIOUS DESCRIPTIONS TO IRAN. THE INITIAL ASSESSMENT IS THAT

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